Complicating the China Trade Talks, Taiwan

Since 1972, the United States has had a policy position entitled the One China Policy This policy regarded that Taiwan was part of China. Since 1972, conditions have changed dramatically where Taiwan wants complete independence and should have it. China is now prepared for war to halt that independence move and it could snare the United States in a military conflict.

Without any fanfare, President Trump signed into law the Asia Reassurance Initiative Act on New Year’s Eve. The section of the law on Taiwan reiterates American commitment “to counter efforts to change the status quo and to support peaceful resolution acceptable to both sides of the Taiwan Strait.” It also calls on the American president to send high-level officials to Taiwan and to regularly sell arms to the island.

Meanwhile, as a result of the detention of Meng Wanzhou, the CFO of Huawei in Canada, who is to be prepared for extradition to the United States, a travel advisory has been issued by the U.S. State Department for Americans traveling in China for either business or pleasure.

Even more importantly, President Trump has taken a harder line on Chinese foreign investment in the United States… finally. Remember it was CFIUS that gave us Uranium One. So, with this harder line, Chinese investors planted in Silicon Valley are bailing out. Silicon Valley is complaining.

Washington demonstrated its tougher stance even before the new law was passed, when Trump in March blocked a $117 billion hostile bid by Singapore-based Broadcom Ltd (AVGO.O) to acquire Qualcomm Inc (QCOM.O) of San Diego. CFIUS said the takeover would weaken the United States in the race to develop next-generation wireless technology.